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5. In terms of investment strategies, equity (stocks) is one of the principal asset classes. The other two are fixed-income (bonds) and cash/cash-equivalents. These are used in asset allocation planning to structure a desired risk and return profile for an investor's portfolio.
The owners' interest is the part of assets that is left after all liabilities are paid. Therefore equity is sometimes called Net Assets. Equity accounts may be divided into following important types: Contributed Capital: Contributed capital is the part of capital that directly comes from its owners.